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There has been a new lender entering the market recently specifically to target the Self Certification market. The lender, SelfCert.co.uk, is based in Prague in order to circumvent the Financial Conduct Authority (FCA) ban on such mortgages being offered by UK based lenders.

Self Certification mortgages first came into the market in the 1980’s and was aimed specifically at the self-employed small business sector. Under self cert the borrower was actually allowed to declare what their income was with no requirement to provide proof of how the figure was reached. The rationale was actually quite sound, many small tradesman earned far more than their taxable earnings would suggest, a combination of not declaring cash in hand work and claiming lots of deductions against tax. Where they came in disrepute was during the lending boom of the noughties when lenders allowed employees to self-certify. Not having to prove income was tempting for many borrowers and brokers and there was some justification when Vince Cable famously labelled them “liar loans” After the credit crunch the FCA decided that this type of business was not acceptable and prohibited UK based lenders from offering them. This has had a profound impact on the market, understandable when you realise that prior to the credit crunch self cert accounted for almost 1/3 of all borrowing.

With no sign of a change to this prohibition in the future SelfCert.co.uk came into the market late last year. They had a relatively small amount of money to lend, £50 million, and this has been gobbled up in 4 days so they have stopped accepting new applications for 3 months.

While it will be understandable for borrowers to think this is a good way to get a mortgage it is potentially very risky. The chief concern is that the lender is not covered by the Financial Services Compensation Scheme (FSCS), so a borrower will have no recourse if things go wrong. As they are based in the Czech Republic they will fall under that countries regulatory regime and borrowers would be advised to research what that is. Finally the business can only be conducted online, there is no facility to be able to call the lender, and I can see that being a real issue for some people.

We will monitor on a regular basis what happens with SelfCert.co.uk and update if we feel anything is worth mentioning.

In the mean time please fee free to contact us for more information on mortgages and remortgages at www.mortgage-finder.org

The Buy to Let market is changing rapidly at the moment and this is being driven by Government (for this read George Osborne) interference in the market, and some of these changes have forced lenders to revise their offerings. As a result of the withdraw of some taxation reliefs they have taken the view they need to lower the amount they will lend for a given rental income. Let me explain.

Buy to Let affordability is assessed in a very different way to a residential, and the key is how much rent can be obtained from a property. A lender will give a bigger mortgage if the rent is £1000pcm than if it was £800pcm, which is only logical. Lenders have never had a common calculation on this, which is why a case can fit with one but not another. There are 2 figures which are used, the “calculation rate” and the “multiplication” rate. To arrive at the figure that can be obtained the rental income received must exceed the mortgage payment by this calculation (based on interest only). The following is an example on a simple purchase case.

Mortgage required £100,000

Expected rental income £550pm

If a lender uses a “calculation rate” of 5% and a “multiplication” rate of 125%, this means the rental must exceed £520.83pm for the mortgage to pass affordability, which it would in this case. This is how you can calculate it:

If you increase the “calculation rate” to 5.5% then figure goes up to £572.91pm and it’s a fail. This is what has been happening in the past few months, with a few lenders even opting to increase the “multiplication” rate as well. The end result is smaller mortgages being granted and bigger deposits being required. I can see this change pushing up rents in the long term, which will be bad news for tenants but, hey, what Government has cared that much about its citizens.

I had a meeting with the area manager for TSB last week and he was pushing the fact that their “calculation rate” was 5%, which is low in the current market, but 2 days later it was raised to 5.5%. It is more important than ever to use a broker who can guide you through the minefield of what is a rapidly changing sector of the market place.

In the autumn statement the Chancellor announced significant increases in Stamp Duty on Buy to Let and Holiday Homes in England, Wales and Northern Ireland purchased after April 2016.

The current rates are,

0% up to £125,000

2% between £125,001 and £250,000

5% between £250,001 and £925,000

10% between £925,001 and £1,500,000

12% above £1,500,001.

The increase will add a flat 3% extra across the board with only a tax free area of up to £40,000 but above that you pay stamp duty on the full purchase price.

0% up to £40,000

3% above £40,000 to £125,000 on the full Purchase Price

5% between £125,001 and £250,000

8% between £250,001 and £925,000

13% between £925,001 and £1,500,000

15% above £1,500,001.

While this might not sound much it will increase the tax take on a property purchased at £275,000 from £3,750 to £12,000, over a 300% increase! The Chancellor expects to raise £1billion from the increase, with a vague pledge that some of it will be used to support First Time buyers. In reality it is an easy way of increasing tax revenues, something which all Chancellors love to do, even Conservative ones. It is a sad fact that only 2 budgets since the war have decreased the overall burden of taxation.

The only ray of sunshine in this is there are no current plans to scrap the ability to offset Stamp Duty against future Capital Gains Tax liabilities. This will potentially have a significant impact on the overall tax burden down the line, but only if the rules allowing this remain in place. Future Chancellors may decide that this will be an easy way of clawing back revenue.

The consensus of opinion is that for the first quarter of 2016 there will be a surge in demand to beat the increase, a flattening out in the second quarter with a potential small fall and recovery in the last 6 months. Matt Lloyd of Skipton Building Society is confident that the overall effect on demand will be minimal.

Leaving aside demand, other effects are potentially more pronounced, especially on Tenants. There is likely to be significant pressure on rents as Landlords seek to recover the extra costs involved at the purchase stage. While the rental market remains buoyant this is a real possibility, especially in areas of high demand and limited supply. There were taxation changes introduced last year which will also add to this pressure, and I shall deal with these in another article, but together they have made some lenders tighten up the rental calculations on which they base their lending decisions. Only a few have moved so far, but expect others to join suit. No lender wishes to be significantly out of step with their competitors as they may find themselves on the Financial Conduct Authority “watch” list!

The Scottish system, called Land and Buildings Transaction Tax, will not be effected by the changes.

Fixed rate mortgages look very good at the moment, the constant threat of rate rises looms in the distance so is it a good time to swap and lock?

A big deposit will get you a two-year fix below 2 per cent, a five-year fix below 3 per cent or a ten-year fix at less than 3.5 per cent. That’s cheap money.

Lenders have been busy cutting fixed mortgage rates since the end of summer, with the pick of the bunch some five-year fixed rate deals that are back at rock bottom levels.

Mortgage rates have been driven down by a combination of elements: low inflation, a fresh bout of eurozone fears, the belief that economic growth will slow and the heat coming out of the property market – especially in London.

All of this has pushed back expectations for when the first Bank Rate rise from 0.5 per cent will arrive. Last week, the Bank of England said the CPI measure of inflation could fall below 1%, highlighting low inflation as the challenge that means rates may not rise until autumn 2015. Subsequently, swap rates – which influence the cost of funding fixed rate mortgages on the money market – have taken a pronounced tumble.

Banks and building societies have also now broadly got to grips with the tougher new mortgage rules introduced in April. These produced a marked slowdown in lending, and now lenders are playing catch-up to meet this year’s lending targets and giving us Brokers some great deals to help them.

There are some catches, some lenders are charging massive arrangement fees which in some cases are worth paying however if you don’t have a big mortgage you may be better off with a slightly higher rate and lower or fee free deal.

It’s wise to also think carefully about whether you expect to move home soon. A good five-year fix should be portable, so you can take it with you. But your new property will need to be assessed and you might need to borrow extra money, and so your lender could still say no. Getting out of a fix typically requires a hefty hit to the pocket from early repayment charges.

You will also need to get your finances in order and be prepared for the lengthier application and interviews getting a mortgage requires nowadays.

Weigh up the above, have a scout around what the best deals look like – and of course give us a call. WE WILL HELP YOU DECIDED AND ARRANGE THE MORTGAGE WITHOUT CHARGING YOU A FEE AS WE ARE PAID BY THE LENDERS.

Today’s low rates may stick around, they may even inch a little lower, but they may be swiftly axed.

If you think you’d kick yourself if you miss out on one, set aside some time over Christmas to consider what to do. Call 01202 577718 and speak to an adviser we are open over Christmas and would love to hear from you.

I will Start by saying this is not an Anti – Wonga campaign and does not only apply to Wonga. It includes all the Payday Loan companies such as, Quick Quid, Kwiki Cash, Cash Cow & Payday Pig plus and all the rest of Quick Cash now type companies. They are all trying to make borrowing money from them look more attractive than going to your own bank and need to be stopped.

Today was the last straw as I had my third Mortgage declined by a High street Bank due to the client having had a Wonga loan in the last 2 years. None had bad credit all had good jobs just they had been seduced by the advert of an easy loan and had no idea of the consequences. It was time to warn my 300 odd friends on Facebook so I made the following post.

To all my FB Buddies, I can get people mortgages with CCJ’s, Defaults and all sorts of missed payments on loans etc. However if you have been taking a Payday loan like WONGA you virtually kill any chance of getting a mortgage for at least the next 12 months and 36 if you want a good rate with a high street lender. This post has been driven by yet another client with no poor credit at all being declined by his own bank. He took a WONGA loan cos his mate told him it would help improve his credit rating and make getting a mortgage easier! Great for me as he has called me but now I am having to put him to Precise on a higher rate and fighting to get it through when the poor lad would have got a great rate 6 months ago before he called WONGA! Be warned.

This post was met by a deluge of private posts from friends worried as they had obviously had a Wonga loan and had no idea of the consequence. Some have indeed already been declined finance for cars and store-cards since taking a loan and had no idea why so I now have realised that my warning came too late for some so I better at least try and warn other people as best I can. Let me explain why they are such a problem.

The payday loan is considered and indeed is a last stop before falling into serious debt, the title payday loan says it all as the idea is that you are so short of money you cant live till payday and need to get some money fast to survive. That was how it was marketed and they targeted and sold to people that have poor credit and can’t get an overdraft at the bank. As a result of the serious desperate nature of the customer the companies can charge ridiculous rates of interest 100 X more than a bank and got away with it. Move on a few years and they have been surprised by the success they have had and with the aid of glossy adverts they are looking to capture a bigger market. They have even sent out Emails stating “get a loan with us to improve your credit rating” The net result is they now capture innocent customers that fall for the hype and think it’s a good idea to borrow money easily and quickly from them rather than save or use the bank!

The reality is that when you take a Wonga type loan they record on your credit file that you have had a loan with them and the terms and when you paid it off. None of this is a problem they will tell you, what they don’t tell you is that this information will be on your file for 6 years and is a very big black mark telling the world that you were so desperate to borrow money you went to a company and paid over 1000% APR for that money which means at that time no-one else would help you.

Currently I have only got 2 or 3 lenders that will consider lending to someone that have taken a Wonga type loan in the last 12 months. They all charge high rates themselves and will really put us through the mill get to the money.

So in brief if you fall into one of these categories before you call Wonga or any Payday Loan Company think long and hard.

You might in the future want to buy a home

You have a mortgage now and are happy but might in the next 3 or 4 years want to move home.

You have a mortgage now but might in the future want to change it for a better rate or raise some cash for home improvements.

If the answer is yes to one or more above, please look at other alternatives to a payday loan.

To Summaries, if you take out a payday loan it can do more damage to your chances of getting a mortgage than a CCJ, Default and or missed payments on Credit cards etc. In fact as of now I have more chance of getting a discharged Bankrupt a mortgage than someone that has been getting a load of payday loans! Be Warned.

We have at last got some good news for everyone. It’s a great time to get a mortgage and you do have some good choices. The big question now is to fix or not to fix your Mortgage rate?

You will need to call on 0845 500 3332 to get advice on what is best for your particular circumstances but the following information will hopefully be of help.

Most Interest rates experts are not predicting any rate rises till the end of 2011 and even then rates will not rocket up. We expect at that point token rate rise of .25% at a time .5% max so there is no need to panic. We expect this to stop at about 2% perhaps 2.5% (currently .5%). However there is no guarantee and indeed they could go up sooner and more which is why talking a mortgage now who offers whole of market mortgage advice is important so you get advise tailored to you.

Fixed rates v Tracker

Short term (2 year) deals are generally not considered good value unless you need a guaranteed repayment for that period and or looking to redeem your mortgage in 2 years. The main reason is 2 year fixed rates start at just less than 3%currently. Unfortunately these come with arrangement fees and if you want a fees free deal you will be offered a higher rate around 3.5%. If you look at Tracker deals you can get around 2% with fees or 2.5% fee free so rates would need to increase a lot for you to end up paying more on a tracker than fixed. These rates are on the lower loan to value deals and increase on the higher loan to value deals but the gap stays much the same.

With longer term fixed deals it is not so clear cut. Today TMW (part of Nationwide) have released a 3.99 % 5 year fixed rate, this is the first sub 4% rate over 5 year that has been offered since Christmas. This is good news to borrowers and does shows rates are looking set to stay low for some time. On the flip side you can get lifetime trackers at just below 2% above the bank of England base rate so again even if rates do go up by 2% it won’t be much higher than a 5 year fixed but it will be higher!

Te possible solution now seems to be the route Woolwich have gone. Offer a lifetime tracker with the option to swap to a fixed without penalty at any point you fancy. Right now this deal is popular with many clients however with the new 4% area fixed deals around for 5 years I suspect we will be recommending them a lot as well.

The above figures are all based on rates at the end of May 2011 which is when this article was produced.

For more info either call a Mortgage Finder adviser on 0845 500 3332 or complete the online enquiry form and we will call you back when you want anytime 7 days a week nearly 24 hours a day.

Due to the resent news that the Base rate rates may stay stagnant for a longer than expected Nationwide has reduced its 3 year fixed rates,

The rates are now 3.79% On its 70% loan to value product and 4.79% on its 80% products.

The new 3 year rates and Nationwide’s new 5 year range moves them to the top of the best buy range with a lead rate of 4.39% fixed for 5 years.

The real good news and the reason we are happy to shout about Nationwide over other lenders is Nationwide is actually lending money they advertise!

Nationwide also are happy to consider all clients not just ones with AAA credit ratings and even have a good way of working out if clients can afford to repay the loan. This is a very welcome change in direction as many lenders (who we better not mention) have been advertising rates for months that no one ever seems to be good enough to qualify for.

Our Mortgage lines are open to Nationwide 9.00 – 9.00 6 days a week.

Call or email us to see if a Nationwide Mortgage is suitable for you. 0845 500 3332

As a follow up to the previous article on fixed or tracker rate mortgages we have found it has attracted a number of enquiries and also a lot of questions. This was just what we hoped the article would do so updating and going into a little more detail now we are at the end of the 1st quarter seems a good idea.

Firstly I must admit that it is now looking like my prediction of a spring rate rise of .25% is wrong. It now looks more like late summer and early winter however the initial .75% prediction by Christmas is still on the cards. This also does not actually affect our advice to many of our customers and indeed the majority are still taking tracker rates but we have now advised many clients to go with a lender offering a swap feature to a fixed rate as a backup.

What is on offer?

Tracker.

As of the end of March 2011 tracker rates are starting as low at 1.49% above the Bank of England Base rate giving a starting rate of 1.99%. There are also lifetime Tracker rates available starting at around 1.99% above the bank of England rate giving mid to late 2% payment rates. These deals require big deposits and fantastic credit rating etc but even on higher loan to values deals and lower credit ratings you can still get some great rates. This means that even with Predicted rate rises of 1.5% over the next 2 years your payment rate would be in the 4% area so compared to 3 years ago very low.

Fixed.

The current good 2 year fixed rate deals start in the low 3% area, 3 years deals in the late 3% area and the current 4 & 5 year fixed rates are in the mid 4% to 5% area. These have risen rapidly from pre Christmas when we were getting 5 year fixed deals at 3.99% without too much trouble.

Fixed or Tracker?

In an article like this we cannot give advice, that can only be done by completing a fact find with us and doing what Mortgage advisors do and assessing everything as everyone is different, however here is a guide.

Fixed rates are going to give you a fixed budget that will not change till the end of a fixed period. Many First time buyers need this so they can budget, and it is also perfect for people who have a tight budget and cannot afford the payments if the rates increase too much. The down side on the shorter term fixed rate mortgages is that on most deals available you pay a higher rate than the tracker, and if rates increase as predicted the tracker rate will just catch up with the Fixed as the fixed ends leaving you on a tracker anyway just as you need it fixed. So in many cases the longer term fixed rates seem better value and indeed that is what most of our fixed clients want.

In the last few weeks the demand for tracker deals has increased so the good old British banks have increased the rates on them. That said limited funds still keep popping up for short periods of time that really are great buys. There are also a couple of lenders offering a swap and lock type mortgage meaning you can take a lifetime tracker and if in 6 months you have a panic attack and wish you fixed instead you can swap without penalty to a fixed. (Terms and conditions apply of courseJ).

This evening I have read a few articles from the money magazines about the subject of fixed or tracker and none give an answer, one even had 10 industry experts give their opinions and just about all of them managed to find a different answer and the reason is that everyone is different and has different needs. The only way to get an actual answer is to speak to a Whole of Market Broker who will talk it through with you and find the best deal for your needs. We can do that if you call 0845 500 3332 or ask for a call by completing the enquiry form. Its free impartial advice so you have nothing to lose.

However as a summary, if you are looking for a mortgage that you don’t need to lose sleep over every time a paper prints a headline “RATES RISING TONIGHT”. Then there are some good long term fixed rate deals available. If however you want to enjoy the low rates we have now and can afford a few percent rises if it does all go a bit mad in the coming years we feel many of the tracker deals are exceptional value especially if they offer a swap feature as well.

The Budget has now been and gone with many feeling disappointed or confused. 1p off Petrol and 14p on Wine to start with is disappointing for most; I feel more good news was needed as this Budget just left us all feeling flat. One question does seem to have simulated interest and questions is the announcement of Funds for a First Buy Direct Scheme. We also had many questions so here is what we have found and our thoughts.

The First Buy Direct Scheme proposal.

The government are making funds available to allow more First time buyers to buy a home.

The funds will be given to first time buyers as a 5 year interest free Equity loan for buyers that earn under 60K.

The Buyer will need to find 5% deposit of the purchase price themselves.

Finally the scheme is limited to New Build Properties only.

Who will this help and what possible problems are going to crop up?

The government suggest this will help 10,000 FTB in the UK so in turn this will also help sell 10,000 new properties and be a boost to property developers and help either move hard to sell home already built and or offer jobs to a currently slow building trade so this is great news for builders which is needed.

On the down side after making a load of calls to lenders today no-one has any indication they are going to be involved. Currently there are no lenders or builders signed up to this scheme, but I suggest all the normal builders are queuing at number 10 for more detail. I also suspect Nationwide and Halifax are likely to want to get involved if the numbers work for them. However I suspect all lenders will have concerns about affordability and what happens after 5 years when the interest free part of the loan kicks in, no lenders are interested in new build flats and as they don’t want any risk at all I am wondering if the government thought to talk to the banks before offering the new scheme or they could have red faces.

Summary

It’s hopefully some good news for a few FTB’s and builders so any good news is good! Personally I would rather have seen a scheme for first time buyers in general, this scheme is only selling empty houses surly it would be better getting chains moving? If 1 FTB buys a flat and that vendor then buys a house and so on you end up with 5, 6 or more properties being sold thus the expected 10,000 people this is First buy Direct scheme is expected to help becomes more like 100,000 with all the work all those people moving generate.

So for those of us that are not First Time Buyers or developers there is nothing in First Buy Direct to get excited about. Therefore my advice is get down the supermarket and buy up all the wine you can whilst we can still afford it.

The Skipton BS has just released a true 95% mortgage, it’s available for first Time Buyers and Remortgages with a free survey on Remortgages.

We call it a true 95% mortgage as there have been attempts in the past from some lenders to offer the same but they required a guarantor with massive equity in their own property, big salaries and to date we have never heard of anyone getting one.

Up till now the only other 95% funds have been on new build properties and or Shared ownership home where the builder puts in 10% and the buyer needs to find 5% themselves. We have had good success with getting new build 95% Mortgages in the Bournemouth, Christchurch & Poole area reported Rob Ashley-Roche of Rest Assured Mortgages as we have a local builder that offers good schemes but we are over the moon that there are 95% funds for buyers and Remortgages throughout the UK now.

The Skipton is trialling the 95% funds and they are limited at present however you can bet that every other lender is watching closely and more will come available through the spring.

Rob also added that more and more lenders are offering 90% funds since Christmas which has seen the rates dropping as competition between the banks increases so hopefully the same will happen with the 95% funds as well as they are double the rate of a 75% mortgage currently.

More details can be obtained from either completing the enquiry form or calling Rest Assured Direct on 0845 500 3332

A study from the Royal Mail advertising their redirection service has suggested that more than 450,000 home movers a year are putting themselves at risk of identity fraud by not quickly telling companies they are moving.

The study discovered that up to 23 per cent of home movers in the UK take two weeks or longer to inform their credit card provider of a change of address. This means potentially confidential information could be delivered to an individual’s old address and into the wrong hands.

Latest figures available show that there were over two million home moves in the UK between April 2009 and March 2010. So 23 per cent equates to 450,000 movers who ran the risk of personal financial information being delivered to their previous address.

The study also found that almost one in five people did not tell their bank (18.5 per cent), insurance company (20 per cent) or council (21 per cent) of a change of address for two weeks or more after a move.

But utility companies received a quicker response with 84 per cent of people telling them of a change of address in less than a fortnight after a move.

Keith Jones, head of data strategy at Royal Mail, said: “Home movers run the risk of becoming a victim of identity theft by failing to inform companies about a new address as quickly as possible.

“The UK has seen a nine per cent year-on-year increase in identity theft in the UK, so this is a very real concern for many home movers.”

We have added a reminder to all our clients that move home to change addresses on everything with a check list the day before completion. We suggest whether you are our client of ours or not that you do the same.

In short it’s been quite a start to 2011, the papers have finally caught up with what we in the business have been saying for ages, and “the rates will go up in 2011”. This in turn has caused a panic of people wanting fixed rates Mortgages and the good old banks enjoyed the new demand and put the rates up on their fixed rate products.

It’s not quite that simple and indeed the banks have not been that devious, or at least I hope not. The truth is that yes the rates are about to go up a little, however it’s not to 1980 prices just a little bit of an increase. I am told between .75% and 1% by most experts I deal with which echo’s my own thoughts of .25% then .5% later in the year. This means that many people are still better off on a tracker and indeed this month we have quoted, advised and sold a 50 – 50 ratio of fixed rate or tracker rate mortgages through January. When choosing between a Fixed or Tracker Rate you need to take into consideration the fees of going fixed, and what the normal rate will be when the fixed finishes which is why you need to call me as it’s my job to advise you which is best. I know its not professional to slag off the banks and to be fair they are not all bad but unfortunately we also they will do what is best for them, so if you listen to a Bank you will likely be told to go on whatever their hot rate is that month and not what is best for you.

The property market has improved dramatically across the country with enquiries for new mortgages having increased. We still are suffering from the lenders making it difficult with first time buyers still needing a 10% deposit to get on the property ladder which means for many they are stuck renting.

Buy to let mortgage are one hot topic at the moment with one lender today increasing their maximum loan to value from 70% to 75% meaning the appetite to lend to landlords is still high. It is a fairly obvious move as with residential mortgages still difficult to get rents are still increasing and tenants are queuing to get a home.

If you wish to discuss any of the points here feel free to leave a comment/complete and enquiry form or call me Rob Ashley-Roche on 0845 500 3332

Report just out from the Coreco National Mortgage Index revels applications for new mortgages have actually increased by 1/3. This echo’s exactly what we have been reporting at the Mortgage Finder after our Brokers at Rest Assured Mortgages have in fact been happily very busy.

The report says that in terms of the type of mortgage people opted for, taking an average for the whole year, 58.5% of borrowers chose fixed-rate purchase mortgages although at the start of the year most were applying for variable rates (54.9%). However, by Q4, fixed-rate mortgages were the product of choice and December saw the highest percentage of fixed versus variable rate mortgages applied for (70.9%) since September 2009. This does slightly differ from our own findings as although the 5 year fixed rates have been very popular, lifetime trackers have been the most commonly chosen products.

We as the report says expect that as the likely hood of an imminent rate rises approach later in 2011, the balance of fixed versus variable is likely to shift further towards fixed rate products, as borrowers no longer feel it is worth gambling on when — and by how much — interest rates will rise.

The availability of mortgage finance remained constrained during 2010, reflected in an average purchase mortgage LTV of just 69.5%, although this is up slightly on 2009 when the average purchase LTV was 68.5%.

Although remortgage activity was subdued through 2010 as a whole, there were signs at the end of the year that the remortgage market was starting to awaken from its slumber according to the research. Of all remortgage applications processed, the average LTV was 53.8%, with 54.3% of those being fixed mortgages. The average loan size of remortgage applications was £143,174 which is almost identical to our findings.

The average age of a purchase mortgage applicant in the UK in 2010 was 37 years 5 months which shows the lack of First Time Buyers in the market. Our own findings are the same with only 5% of enquiries coming from First time Buyers but encouragingly they appear to be coming back as the key words “First Time Buyer Mortgages” has been 30% of the searches on our web site only behind “Poor Credit Mortgages” which is the most common enquiry at present.

Lenders are looking to lend with Woolwich and the Lloyds group publicly saying they want a bigger share of the market than previous years. Santander have already dropped their rates and eased their lending Criteria to increase business so we fully expect a few price wars in the coming months which can only benefit customers.

Our Broker Rob Ashley’s comments for 2011 were that “the future does look bright but at this stage he is not needing to buy shades, more just tinted lenses” J

If you work for a Bank it’s clearly going to be a great year if you believe this article, I suspect there are a few more Bankers with closets full of skeletons which I look forward to reading about but we do appear to be slowly returning to normality, Unfortunately us non-bankers are unlikely to get Millions in bonuses we will hopefully earn more and feel happier in 2011 than last year.

Towards the end of 2010 one of my Blogs in BTL Mortgages predicted that in 2011 it will be a great year for landlords, this week that news hit national press and I even heard whilst eating me breakfast that now is the time to buy on Radio 1! That publicity actually will help us all as its positive news and means many would be landlords will start to look at buying and help move the economy as well as crate more rental homes for families that cannot buy.

Another blog that is proving true was on Poor Credit Mortgages. This week I have placed a mortgage for a client with 2 Defaults from 5 years ago for over £2000. This is with a High Street lender and only took a little extra convincing when it got to underwriters than a normal AAA Mortgage.

More Positive news has recently been released by the Bank of England saying that more customers are getting Remortgages and new mortgages towards the end of 2010 and was also echoed in another blog from me earlier this week as Estate agents are reporting the same.

Unfortunately I do have a little negative news as unfortunately this week we lost the 3.75% 5 year Fixed rates, and as normal there was no warning and resulted in both Clive and myself at Rest Assured Mortgages working till midnight trying to reserve funds for our clients. It was not just Natwest that pulled the 3.75% but First Direct as well and Skipton pulled their 3.98%. Is this the first sign of rates increasing? At present I believe it’s just a case that the lenders had become swamped so pulled the rates to stop new cases coming in for a while and take a breather however I am watching carefully.

Outlook.

If I had a crystal ball that worked I would not be sat in the office in cold Bournemouth typing this blog but I would be sat on a balcony somewhere very warm overlooking the sea. I think the only thing that is certain is by the summer the Bank of England will have put up its rates and by the end of the year we will see a BoE base rate at more than 1%. To most that will not break the bank as it only means a rise of less than £100 per month however to some it could spell disaster. With similar or more rises predicted and looking very likely in 2012 getting your mortgage fixed now could be very wise.

This week we have stated speaking to all our clients offering product transfers (swapping rate not Lender) or remortgages to fixed rates. I do see a made panic to get on a fixed rate yet but I also don’t see hanging on will benefit anyone of getting a cheaper deal in the future.

For First Time Buyers it really now does look like a good time to buy. Estate agents are reporting taking on more properties which means to sell Vendors will need to price their homes competitively. This means there will be bargains out there but also the likely hood of prices continuing to rise as they did in 2010.

Feel free to give me a call to chat over your Mortgage needs on 0845 500 3332 or send me a message and I will call you. Cheers Rob

The number of houses sold in the UK in December 2010 was the highest December figure for three years according to the latest Agency Express Property Activity Index.

December house sales were 32% up on January’s, meaning the end of 2010 was much healthier than the beginning.

It was a similar story for the number of properties being put up ‘For Sale’. Although there was a 41.3% decrease in December compared to November – the fourth consecutive monthly fall – this was in line with what has usually occurred in previous years but still 22.5% higher than December 2009 and 37.1% better than December 2008.

Stephen Watson, Managing Director, Agency Express, said:

“2010 has certainly been a fascinating year for house sales activity. So many factors have had an effect on home owner and house buyer sentiment that it’s difficult to draw too many firm conclusions about what 2011 will bring. However, the contraction in supply of houses on the market could mean that there will be a stabilisation of house prices after the recent falls that may lead to renewed confidence returning to the market.

“With the impacts of the Government’s austerity measures still to be fully felt in the economy, the increase in VAT and the expected continuation of very low interest rates, 2011 will undoubtedly be another interesting year for the property and mortgage markets.

“January has traditionally seen a significant uplift in properties being put on the market so we will be closely monitoring the findings of our Index for signs of evidence of an increase in activity over the next few weeks”.

The North East, Wales and Central England fared best in December for house sales with falls of 13.0%, 18.8% and 19.6% respectively. The worst hit regions were Scotland down 36.6%, Yorkshire down 35.2% and the South East down 30.7%.

Milton Keynes was the only UK city not to see a fall in the number so sales agreed in December seeing the same level as November’s. Nottingham only experienced a 4.2% drop with Exeter seeing a 4.4% decrease. At the other end of the scale Coventry had the worst monthly decline in the number of house sales at -53.3%. Glasgow saw a drop of 43.7% and York had a 42.5% fall.

In terms of new properties coming onto the market there was a pretty consistent contraction across all regions. The West Midlands saw a 33.9% decrease with the East Midlands having the worst drop of 51.9%.

Of the UK cities, Bristol, Birmingham and Leeds held up the best with declines of 20.0%, 22.1% and 25.3% respectively. Newcastle saw the most striking fall in the number of properties being put up ‘For Sale’ with a 59.1% fall with Glasgow -55.8% and York 52.4% not far behind.

I guess the summary is if you’re a first time buyer now is a good time to buy.

Mortgage affordability for those looking to take their first steps onto the property ladder is at its most favourable for 12 years, according to Halifax.

The proportion of disposable earnings devoted to mortgage payments by a potential new first time buyer stood at 27% in September 2010; the lowest since December 1998 and almost half of the peak level of 50% in September 2007.

This significant improvement in affordability over the past three years has been mainly driven by a combination of lower house prices and declining mortgage rates.

In 2010, 40% of local authority districts (LAD) across the UK were ‘affordable1′ for the average first time purchaser, a considerable improvement from 2007, when only 6% of areas were affordable, although this is less than half the proportion of the affordable LADs in 2000 (82%).

The North East is the most affordable region in the UK for first time buyers, 83% of local authority districts here are affordable to FTBs, more than in any other region.

Only 5% of first time buyers paid stamp duty between April and November 2010 as a result of the temporary increase in the stamp duty threshold for FTBs from £125,000 to £250,000 announced in March.

Nationally, 39% of home purchases made by FTBs have benefitted from the increased allowance. First time buyers in the South East have benefited most from the change, almost three quarters (73%) of FTBs in the region not paying stamp duty due to the increase.
Martin Ellis, housing economist at Halifax, commented:

“The ‘noughties’ were a difficult period for many looking to get onto the property ladder. The substantial rise in house prices over much of the decade prevented many potential first time buyers from entering the market, however, affordability has improved significantly over the past three years.

“Whilst the tightening in lending criteria experienced across the mortgage industry since the onset of the credit crunch in 2007 deterred first-buyers from trying to secure mortgage finance, there are now encouraging signs of a modest improvement in mortgage availability.

If you wish to talk to an advisor about buying your first home please contact us via the enquiry page.

A report out by the Confederation of British Industry (CBI) says the UK economy will escape a “double dip” next year, but households face a tight squeeze on living standards.

With a hike in VAT to 20% coming on 4 January and consumer confidence hitting record lows, ministers will be concerned the UK’s fragile recovery could be derailed by renewed crises in the eurozone, writes the Independent.

The CBI said that the Bank of England will need to raise interest rates further and faster than previously thought, because of the impact of rising world commodity prices on inflation.

The bank rate, which currently stands at 0.5%, will be 0.75% by the spring of next year the CBI said, rising steadily to 1.25% this time next year and to 2.75% by the end of 2012.

Even at such levels, however, rates would be low by historical standards. The upward trend in rates will put additional pressure on the seven million mortgagors on variable rate deals linked to the Bank rate, adding hundreds of pounds a month to mortgage repayments.

Despite many risks to the outlook, and a forecast of particularly fragile growth at the beginning of 2011, the UK recovery is expected to be maintained”, according to the CBI, which “still considers the risk of a double dip back into recession to be low”.

What do we think?

For 2010 we have not been recommending short term Fixed rates although some clients have been requesting them. Lifetime trackers still offer good value as even at 5% by the end of 2012 they are still lower than rates we have seen in the past buy a long way, however the 3.75% and 3.99% 5 year deals we have on offer look very good now and is by far the most sold product we have currently.

Our forecasts are based on the prevailing consensus among economists that the UK will avoid a “double dip” recession, but that economic activity next year will be uneven. While we expect growth in UK output of a little over 2% next year, the risks are mainly on the downside.

With growth in output likely to be relatively modest and the rate of inflation expected to fall sharply at the beginning of 2012 as the effect of January’s increase in VAT to 20% falls out of the annual calculation, the Bank of England is expected to continue to pursue a relaxed monetary policy.

It is unlikely that the base rate will rise significantly in the short term and it is quite possible that it will remain unchanged at its current level of 0.5% for the whole of next year.
The key messages behind our forecasts for 2011 are:

The UK economy has begun a process of long-term re-balancing. Public sector spending cuts imply a difficult jobs market in the coming years. And with households also seeking to reduce levels of indebtedness, demand for mortgages may be subdued for some time.

Over the short to medium term, lenders will need to manage some large-scale re-financing of wholesale funding. From April next year onwards, lenders will begin to have to re-pay the funding advanced through official support schemes. This is likely to limit the availability of credit to support mortgage lending next year, and beyond.

The continuing prospect of low interest rates, and flat or modestly falling house prices, reinforces the likelihood that remortgaging levels will remain low, even though growing numbers of borrowers are coming to the end of introductory deals and reverting to their lenders’ standard variable rate.

Low interest rates will help the vast majority of households to manage to keep up with their loan repayments and so will help keep mortgage arrears and possessions in check.

The outcome of the Financial Services Authority’s (FSA) ongoing mortgage market review continues to be a major and unhelpful source of uncertainty for the lending industry. Firms do not know when the FSA will issue firm rules or whether it will modify its current excessively risk-averse approach. This uncertainty will itself reinforce lenders’ caution.

Each house sold once every 20 years

The global financial crisis has had a pronounced impact on mortgage and housing markets. As a result, we have moved from a period with residential property transactions of over 1.6 million a year to one in which sales have fallen below 900,000.

Next year, we expect the number of transactions to total 860,000, that is very similar to the levels of the three previous years. The recent level of sales means that each property in the UK’s stock of 18 million privately owned homes is now only changing hands at a rate of once every 20 years. Given the continuing economic uncertainties, there is little to encourage buyers.

The £250,000 stamp duty exemption for first-time buyers is scheduled to come to an end in December next year, and this is likely to give a modest boost to sales as 2011 progresses and particularly as the deadline gets nearer. But the effect of this is more likely to bring forward transactions, rather than stimulate any significant new housing market activity.

Remortgaging to remain subdued

Many of the things that influence market sentiment are unlikely to change to any significant extent next year, and we expect remortgaging to remain subdued. With interest rates staying at historically low levels, there is little incentive for buyers to rush to take advantage of existing fixed-rate deals.

Borrowers currently on attractively priced standard variable rates also have little incentive to change. And many of those borrowers who would like to switch in order to pay a lower rate do not have enough equity in their property to meet the loan criteria.

First-time buyers will continue to find it difficult to get into the market. There is a crumb of consolation for them in that house prices are unlikely to rise significantly. While recent house price weakness may persist for some months, we do not foresee any sharp fall in prices, or large numbers of buyers holding off in the hope of getting a better price in the future.

Uncertainty about the availability and cost of mortgage funding will remain. The big issue for lenders next year will be to re-finance existing wholesale borrowing and begin to pay back the very large amounts of funding advanced through official support schemes.

However, the prospects of them being able to do this without adversely affecting the market have improved. The amount due to be repaid under the special liquidity scheme by January 2012 has declined from about £180 billion to around £130 billion currently. But despite a relatively favourable autumn for wholesale funding, the ability of lenders to continue to raise funds through securitisation and the issuing of bonds remains uncertain.

Fortunately, the financial crisis in Ireland does not appear to have deterred investors in UK residential mortgage-backed securities, but further crises of confidence in the euro zone may do so.
Funding developments

Deposit-taking lenders are continuing to seek to reduce their dependence on wholesale funding by increasing their holdings of retail savings. As a result, competition for retail savings has become intense, pushing up their cost. Meanwhile, pressure on household budgets next year will reduce their capacity to save, ensuring that competition for the limited supply of retail savings will remain fierce.

With funding in short supply, the availability of mortgages for first-time buyers will remain limited. Lenders are likely to continue to have only a modest appetite for advancing mortgages at higher loan-to-value ratios. This is understandable in an uncertain operating environment, but it is now being reinforced by the higher capital requirements for low-deposit loans.

As capital requirements are tightened through the new Basel III rules, lenders will continue to channel funding towards lower-risk customers, including those with larger deposits. These trends are being further reinforced by the uncertainty surrounding the FSA’s mortgage market review. Existing proposals, if implemented, would exclude many potential borrowers from the market, restrict remortgaging options for many existing borrowers, and remove altogether some types of product from the market.

Although the FSA says it is still consulting, uncertainty about the final rules will continue to reinforce the cautious approach being taken by lenders. With modest economic growth, low interest rates, and private sector job creation offsetting public sector job losses, we do not foresee a significant change in the number of borrowers falling behind with their mortgages over the next 12 months.

However, the rate of improvement in mortgage arrears has declined sharply over the last six months. While lenders will continue to work with borrowers, debt advisers and the government to manage arrears, there will inevitably be some cases where it is not possible to recover the situation and where possession remains the only realistic option.

We predict a modest increase in arrears and possessions next year, reflecting the continuing pressure on household finances, the persistence of cases of long-term arrears and the government’s decision to cut help for borrowers by cutting payments of support for mortgage interest.

Conclusion

The economy – and housing and mortgage markets – have made significant progress since the financial crisis of two years ago and now appear to be on a more stable footing. But recovery has been patchy and weak. The supply of funds to the mortgage market remains much more limited than before the crisis, and households are much less confident about taking on large-scale borrowing commitments.

These factors, along with the regulatory constraints imposed by increased capital requirements and the possibility of rule changes being considered by the FSA, have influenced our forecasts for next year. Activity in housing and mortgage markets is set to remain broadly flat in 2011 and we do not envisage a return to the lending levels that characterised the middle of the last decade for many years to come.

This week saw the Bank of England’s Base rate stay static for yet another month. The forecast is that the rate will not increase now until at least the spring and some think it could be longer. It has been revealed that in the November meeting it was yet again only Andrew Sentence who voted to increase rates by .25% and Adam Posen voted to increase The Bank’s £200 million programme of quantitative easing. The rest had a nice lunch and voted to do nothing.

More reports came in on house prices and yet again will confuse people. I first read one report from the Internet Estate agent web site Rightmove which completely contradicted another however after reading a second time I realised what they are actually saying does not follow the headline. Rightmoves figures have shown that people are having to drop the prices of their properties to sell, this is the case but only due to the Estate agents overpricing properties in the first place to get them on their books. I have first hand evidence of desperate Estate Agents overpricing by up to 20% to get a property on and then badgering the Vendor from day 1 to reduce the price. I guess this is a warning to sellers to get the property Valued by a number of Agents and if one seems silly more than ther rest beware, the Agent could have had adirective from HQ to get properties on at any cost!

More interesting and accurate I believe is the LSL Acadametrics report which is based on hard facts from Land registery, also LSL own leading Estate agent chains, Survaying firms and Mortage networks including as from the 1st of December my Network BDS.

The LSL Acadametrics report headlines are;

Average house prices registered a 0.2% increase in November. This is the seventh consecutive month in which the market has seen a marginal gain in price.

Year on year house price growth slowed yet again, down to 5.9%, and will slow further as the larger gains of a year ago fall out of the calculations.

The number of transactions in November fell by 4.6%, in the month, and are down 5.3% compared to last November. This is the second consecutive month this year in which transactions are lower than 2009 levels.

The summary does indicate that London and the south will continue to recover and prices will slowly continue to increase. Up north things will take longer which Echo’s my thoughts in an earlier blog a few weeks ago and the old North South divide.

Finally and for fans of the Apprentice which we all saw nice guy Chris Farrell leave a few weeks ago, and I for one was disappointed for him appears to have a dark side, I have copied a press release below that hit the financial press headline this week.

A former mortgage broker, who was a contestant in this year’s series of The Apprentice, has been charged with four counts of mortgage fraud.

Former Royal Marine Christopher Farrell (pictured), from Plymouth, was arrested in August and has now been charged with fraud by false representation.

Farrell is alleged to have forged documents including pay slips and P60s in order to obtain mortgages for his clients during the ten months he worked as a broker in 2009.

He has been bailed to appear at Plymouth Magistrates’ Court on 22 December.

In a statement, Crown Prosecution Service, Devon and Cornwall, senior crown advocate David Gittins said: “I received a file of evidence in relation to allegations of mortgage fraud in October.

“Having carefully considered all of the available evidence I have decided that Christopher Farrell be charged with four counts of fraud by false representation.”

Farrell was booted off The Apprentice in November, after Lord Allan Sugar told him that he lacked the “spark of entrepreneurial genius” he was looking for.

Farrell has formerly been charged with possessing offensive weapons, including a knuckle duster and extendable baton, for which he received a two-year conditional discharge and was ordered to pay £847 costs.

In the mad mad world of Celebrities I am sure all the Mr Jekyll & Hyde will only help him to become a superstar of the future and he will be running his own Financial advice show for Channel 5 soon!

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